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Glossary of Tennessee Legal Terms

Plain-English definitions of terms used in the articles on this site. Each one cites its source and links to the article that explains it in full.

501(c)(3) organization: A nonprofit organized and operated exclusively for religious, charitable, educational, or other purposes listed in the statute, and exempt from federal income tax. None of its net earnings may benefit a private individual, it may not take part in political campaigns for or against candidates, and only an insubstantial part of its activities may be lobbying (26 U.S.C. § 501(c)(3)).; Read the article: Forming a Nonprofit Corporation in Tennessee: The Charter, the Board, and 501(c)(3) Exemption
Abandonment of an easement: The end of an easement because its holder intended to give it up and acted on that intent. The party claiming abandonment must prove it by clear, unequivocal evidence of both an intention to abandon and external acts carrying that intention into effect; nonuse alone is not enough (Hall v. Pippin, Tenn. Ct. App. 1998). For an easement created by express grant, mere nonuse, however long continued, is not sufficient evidence of abandonment (Edminston Corp. v. Carpenter, Tenn. Ct. App. 1976).; Read the article: Easements in Tennessee: How Access Rights Are Created, Used, and Ended
Adverse possession: Gaining title to land by possessing it for a period set by law. The possession must be exclusive, actual, adverse, continuous, open, and notorious for the full period (Cumulus Broadcasting, Inc. v. Shim, Tenn. 2007). Seven years of adverse possession under a deed or other assurance of title that was recorded for the full seven years vests title to the land it describes (Tenn. Code Ann. § 28-2-101); the seven-year statutes that bar the owner's suit can be used only as a defense, not to claim title (§§ 28-2-102, 28-2-103; Cumulus); and twenty years of uninterrupted possession raises a presumption of a grant and vests title in the possessor (Cumulus).; Read the article: Title Defects and Clouds on Title in Tennessee: How They Get Fixed
Anticipatory repudiation: A party's statement or act, before performance is due, that amounts to a total and unqualified refusal to perform a contract, or a voluntary act that makes the party unable or apparently unable to perform. An indication that more negotiation is sought is not a repudiation. The other party may rescind, treat the repudiation as an immediate breach, or wait for the time of performance and sue then (UT Medical Group, Inc. v. Vogt, Tenn. 2007).; Read the article: Breach of Contract Claims in Tennessee: Elements, Remedies, and Deadlines for Business and Property Owners
Certificate of authority: The registration an LLC formed in another state must obtain from the Tennessee Secretary of State before transacting business in Tennessee. Some activities do not count as transacting business, such as owning property without more, or an isolated transaction completed within one month that is not one of a series of similar transactions (Tenn. Code Ann. §§ 48-249-902, 48-249-904).; Read the article: Registering an Out-of-State LLC in Tennessee: When a Certificate of Authority Is Required
Charter: The document filed with the Tennessee Secretary of State to form a corporation; many states call it the articles of incorporation. It must state, among other things, the corporation's name, the number of shares it is authorized to issue, and its registered office and agent (Tenn. Code Ann. §§ 48-12-101, 48-12-102).; Read the article: Forming a Corporation in Tennessee: The Charter, Bylaws, Shares, S Election, and Upkeep
Continuing guaranty: A guaranty that is not limited to a particular transaction but is intended to cover future transactions until it is revoked (Farmers-Peoples Bank v. Clemmer, Tenn. 1975). Absent a contractual undertaking, the creditor has no duty to tell the guarantor that new debt is being incurred, and how the guaranty may be revoked, such as by written notice the creditor actually receives, depends on its own terms (SunTrust Bank v. Dorrough, Tenn. Ct. App. 2001).; Read the article: Personal Guaranties in Tennessee: What Owners Sign for Leases and Loans
Detainer warrant: The papers that start an eviction case in Tennessee. The case is usually heard in general sessions court, though it may also be filed in circuit court (Tenn. Code Ann. §§ 29-18-107, 29-18-108), and the trial may be set no sooner than six days after the tenant is served (§ 29-18-117). The court decides who is entitled to possession and, if the landlord wins, any rent, interest, and damages owed, but not who owns the property (§§ 29-18-119, 29-18-125), and no writ of possession may issue until ten days after judgment (§ 29-18-126).; Read the article: Facing an Eviction in Tennessee: A Tenant's Guide to the Process and Defenses
Easement: An interest in property that gives its holder a legally enforceable right to use another's property for a specific purpose, such as a driveway or utility line (Hall v. Pippin, Tenn. Ct. App. 1998). Tennessee courts list express grant, reservation, implication, prescription, estoppel, and eminent domain among the ways one can be created (Pevear v. Hunt, Tenn. Ct. App. 1996).; Read the article: Easements in Tennessee: How Access Rights Are Created, Used, and Ended
Exculpatory clause: A contract term that releases one party in advance from liability. Tennessee courts decide whether to enforce one by weighing the parties' relative bargaining power, the clarity of the language, and public policy, and a party may not exempt itself from liability for gross negligence, reckless conduct, or intentional wrongdoing (Copeland v. HealthSouth/Methodist Rehabilitation Hospital, LP, Tenn. 2018).; Read the article: Vendor, Supplier, and SaaS Agreements in Tennessee: What the Buyer Should Read Before Signing
Guaranty of collection: A guaranty under which the guarantor must pay only on the condition that the creditor has pursued the debtor without success. Tennessee cases treat it as conditional, while a guaranty of payment is absolute (Hassell-Hughes Lumber Co. v. Jackson, Tenn. Ct. App. 1949). When a signature on a negotiable instrument unambiguously guarantees collection rather than payment, the signer must pay only if a judgment against the debtor has gone unsatisfied, the debtor is insolvent or in an insolvency proceeding, the debtor cannot be served, or it is otherwise apparent that payment cannot be obtained from the debtor (Tenn. Code Ann. § 47-3-419(d)).; Read the article: Personal Guaranties in Tennessee: What Owners Sign for Leases and Loans
Guaranty of payment: A guaranty under which the guarantor must pay the debt when it comes due if the debtor has not; on the debtor's default, the guarantor's obligation becomes fixed. It is treated as absolute, unlike a guaranty of collection, which is conditional on the creditor first pursuing the debtor without success (Hassell-Hughes Lumber Co. v. Jackson, Tenn. Ct. App. 1949). A guaranty may also include the guarantor's waiver of any right to require the lender to proceed first against the borrower or to exhaust collateral, as the bank guaranty in Shelby Electric Co. v. Forbes (Tenn. Ct. App. 2005) did.; Read the article: Personal Guaranties in Tennessee: What Owners Sign for Leases and Loans
Implied partnership: A partnership that exists because two or more people carry on a business for profit as co-owners, even without a written agreement and whether or not they meant to form a partnership (Tenn. Code Ann. § 61-1-202(a)). Receiving a share of the profits generally raises a presumption of partnership, but co-owning property, even with shared profits from its use, does not by itself create one (§ 61-1-202(c)).; Read the article: Partnership Agreements in Tennessee: What the Default Rules Do When Nothing Is in Writing
Indemnity clause: A contract term in which one party agrees to cover another party's losses or claims. In Tennessee, a promise to indemnify someone against that person's own negligence must say so in clear and unequivocal terms (Kroger Co. v. Giem, Tenn. 1964), and in a contract for the construction, alteration, repair, or maintenance of a building, a promise to indemnify a party against injury or property damage caused by its sole negligence is void (Tenn. Code Ann. § 62-6-123).; Read the article: Vendor, Supplier, and SaaS Agreements in Tennessee: What the Buyer Should Read Before Signing
Interpleader: A lawsuit in which someone holding money or property that others claim asks the court to make the claimants settle their competing claims between themselves. Claimants may be required to interplead when their claims could expose the holder to double or multiple liability, and the court may discharge a holder that has deposited the property from liability for it before deciding who is entitled to it (Tenn. R. Civ. P. 22.01, 22.02). For disputed earnest money held by a broker, TREC's rule lists filing an interpleader action as one way to release the funds and, absent a compelling reason, requires the broker to disburse, interplead, or turn the money over to an attorney to interplead within 21 calendar days after receiving a written request for disbursement (Tenn. Comp. R. & Regs. 1260-02-.09(7)(f), (9)).; Read the article: When Earnest Money Becomes a Lawsuit
Judicial dissolution: A court order dissolving a business entity, which starts the process of winding up its affairs and closing it. Under Tennessee's Revised LLC Act, a court may dissolve an LLC whenever it is not reasonably practicable to carry on the business in conformity with the LLC documents (Tenn. Code Ann. § 48-249-617(a)).; Read the article: Dissolving a Tennessee LLC: Member Votes, Court Orders, Administrative Dissolution, and Winding Up
Land contract (contract for deed): A sale in which the buyer pays the price in installments and the seller keeps legal title until the payments are complete, then deeds the property to the buyer (Harmon v. Eggers, Tenn. Ct. App. 1985). In the meantime, the buyer has an equitable ownership interest in the property (King v. Dunlap, Tenn. Ct. App. 1996). An unrecorded land contract still binds the buyer and seller but is void as to the seller's existing or later creditors and as to bona fide purchasers without notice (Tenn. Code Ann. §§ 66-26-101, 66-26-103), and since April 27, 2026, an agreement for the sale of real property may be registered only if it carries the authenticated signatures of the owner (or the owner's attorney-in-fact or court-appointed representative) and the buyer and states its expiration date (§ 66-24-101(a)(29), added by 2026 Tenn. Pub. Acts ch. 865).; Read the article: Owner Financing and Land Contracts in Tennessee
Liquidated damages: An amount the parties set in the contract, in advance, as the damages for a breach. Tennessee courts ask whether the amount was a reasonable estimate of potential damages and whether actual damages were indeterminable or difficult to measure, judged when the contract was made; a clause intended merely to penalize is unenforceable (Guiliano v. Cleo, Inc., Tenn. 1999).; Read the article: Breach of Contract Claims in Tennessee: Elements, Remedies, and Deadlines for Business and Property Owners
Lis pendens: A recorded notice that a pending lawsuit affects title to, or an interest in, real property. A judgment, order, injunction, or other writ affecting the title, use, or possession of real estate binds a nonparty who has or later acquires an interest in the property only after a copy or abstract of it, or a notice of lis pendens, is recorded in the register's office of the county where the property lies (Tenn. Code Ann. § 66-24-119). Separately, when a suit seeks to fix a lien lis pendens on real estate in the county of suit, bona fide purchasers and encumbrancers for value are not affected until a clerk-certified abstract of the suit is recorded there (§ 20-3-101).; Read the article: Title Defects and Clouds on Title in Tennessee: How They Get Fixed
Material breach: A failure to perform that is serious enough to excuse the other party from performing its own remaining obligations. Only an uncured material failure has that effect, and a party that ends the contract over deficiencies that are not material is not entitled to do so (McClain v. Kimbrough Construction Co., Tenn. Ct. App. 1990). Tennessee courts judge materiality using the factors in Section 241 of the Restatement (Second) of Contracts, such as how much of the expected benefit the injured party loses and whether money can make up for it (Adams TV of Memphis, Inc. v. ComCorp of Tennessee, Inc., Tenn. Ct. App. 1997), and the party that commits the first material breach is not entitled to damages stemming from the other side's later material breach (Forrest Construction Co. v. Laughlin, Tenn. Ct. App. 2009).; Read the article: Breach of Contract Claims in Tennessee: Elements, Remedies, and Deadlines for Business and Property Owners
Mechanics' lien: A lien on real property that secures payment for work, labor, or materials furnished to improve it. Tennessee's statute gives a lien to a prime contractor, who contracts directly with the owner or the owner's agent, and, if it meets the statute's notice requirements, to a remote contractor, such as a subcontractor or supplier, who contracts with someone else; but no lien exists if the lienor has not fully complied with the contractor licensing law where it applies, and on residential property of one to four units that the owner occupies or intends to occupy as a principal residence, the lien generally exists only in favor of the prime contractor (Tenn. Code Ann. §§ 66-11-101, 66-11-102(a), 66-11-115(a), 66-11-146). A prime contractor's lien lasts one year after the improvement is completed or abandoned, and a remote contractor's lien 90 days after it serves its notice of lien, in each case plus the time of an enforcement suit properly brought within that period, though keeping the lien's priority against later buyers and lenders generally requires recording a sworn statement within 90 days after completion or abandonment (§§ 66-11-106, 66-11-112(a), 66-11-115(b)).; Read the article: Tennessee Mechanics' Liens: The Deadlines That Decide Who Gets Paid
Merger of an easement: The end of an easement when its holder acquires ownership of the land the easement crosses, because the owner of property cannot also have an easement over the same property (Hall v. Pippin, Tenn. Ct. App. 1998). Courts normally will not apply merger where third parties have independent interests in the easement, and merger does not cut off a third party's continuing interest in it (Hall).; Read the article: Easements in Tennessee: How Access Rights Are Created, Used, and Ended
Operating agreement: The agreement among an LLC's members that governs how the company runs, such as management, contributions, distributions, and transfers. Under Tennessee's Revised LLC Act it may be written or oral, and together with the articles of organization it makes up the company's "LLC documents" (Tenn. Code Ann. § 48-249-102).; Read the article: When the Operating Agreement No Longer Matches Reality
Option to purchase: An offer to sell that the holder may accept or not. A written option given for valuable consideration stays open, and cannot be withdrawn, for the time it allows (Bradford v. Foster, Tenn. 1888). Time is of the essence, and acceptance must exactly and precisely match the option's terms (Ray v. Thomas, Tenn. 1950; Adams v. Swift, Tenn. Ct. App. 1973).; Read the article: Rights of First Refusal and Purchase Options in Tennessee Real Estate
Partition: A court action in which a co-owner of real property asks the court to divide it among the co-owners, or to order it sold and the proceeds divided. A person who holds land as a tenant in common or otherwise with others is entitled to partition, or to a sale for partition (Tenn. Code Ann. § 29-27-101).; Read the article: Partition Actions in Tennessee, and What the Heirs Property Act Changed
PLLC (professional limited liability company): An LLC formed to provide a professional service, such as medicine, accounting, or architecture, that only licensed individuals may provide. Each professional remains personally liable for his or her own professional work, but not for a colleague's unless also at fault (Tenn. Code Ann. §§ 48-249-1102, 48-249-1119).; Read the article: PLLCs in Tennessee: Ownership, Liability, Buyouts, and Licensing-Board Rules for Professional LLCs
Possession bond: The bond, equal to one year's rent, that a tenant who appeals an eviction judgment must post to stay in the property while the appeal is pending. A general sessions judgment may be appealed to circuit court within ten days (Tenn. Code Ann. § 27-5-108). Since a 2024 amendment, the statute says that if the tenant appeals, the appeal "must not be allowed" unless the tenant posts a bond, cash deposit, letter of credit, or two personal sureties in the amount of one year's rent (§ 29-18-130(b)(2)(A)). The statute also says the landlord may obtain possession without posting its own bond if the tenant appeals without complying (§ 29-18-130(b)(2)(B)). In Boyd v. Finchum (Tenn. Ct. App. 2025), the Court of Appeals found the 2024 amendment "immaterial" to the case before it and applied Johnson v. Hopkins (Tenn. 2013): the bond is required only of a tenant who keeps possession and wants to stop the landlord's writ of possession during the appeal. Boyd is a single Court of Appeals decision, and it affirmed the dismissal of that tenant's appeal on another ground.; Read the article: Facing an Eviction in Tennessee: A Tenant's Guide to the Process and Defenses
Prescriptive easement: An easement acquired by long use rather than by a written grant. The claimant must prove by clear and convincing evidence at least twenty years of use that was adverse, under a claim of right, continuous, uninterrupted, open, visible, exclusive, and with the owner's knowledge and acquiescence; "exclusive" does not mean the claimant was the only user (Stone v. Brickey, Tenn. Ct. App. 2001). Use by permission is not adverse.; Read the article: Easements in Tennessee: How Access Rights Are Created, Used, and Ended
Procurement of breach of contract: Inducing someone to break a contract with another party. Tennessee's statute makes a person who procures the breach of a lawful contract liable for three times the damages resulting from the breach (Tenn. Code Ann. § 47-50-109). The person must have known of the contract and acted intentionally and with malice, and a separate common-law claim also exists.; Read the article: Tortious Interference in Tennessee: Inducing a Breach of Contract and Interfering With Business Relationships
Procuring cause: The test for whether a real estate broker's efforts were the efficient cause of a sale, so that the broker can be owed a commission even when the owner closed the deal directly. Introducing the buyer does not by itself give the broker a permanent right to a fee, and there is no commission where the broker's efforts ended without a deal, there was a gap in activity, and negotiations later resumed without the broker (Pacesetter Properties, Inc. v. Hardaway, Tenn. Ct. App. 1981). An owner who cuts the broker out in bad faith without ending the agency, and then sells to the buyer the broker introduced, can still owe the fee (Parks v. Morris, Tenn. Ct. App. 1995).; Read the article: Real Estate Commission Disputes: When More Than Money Is at Risk
Public benefit corporation: A Tennessee nonprofit corporation designated as a public benefit corporation in its charter, the form charities generally use. The charter must say whether the corporation is a public benefit or a mutual benefit corporation (Tenn. Code Ann. § 48-52-102), and the Attorney General must receive notice before a public benefit corporation dissolves (§ 48-64-103).; Read the article: Forming a Nonprofit Corporation in Tennessee: The Charter, the Board, and 501(c)(3) Exemption
Qualified intermediary: In a deferred 1031 exchange, the person who holds the sale proceeds and arranges the transfer of the old and new properties so the investor never receives the money. The intermediary may not be the investor or a disqualified person, and for the safe harbor to apply the written exchange agreement must expressly limit the investor's rights to receive, pledge, borrow, or otherwise obtain the benefits of the funds (Treas. Reg. § 1.1031(k)-1(g)(4)(ii), (g)(4)(iii), (g)(6)). Money credited to the investor's account, set apart for the investor, or otherwise made available is treated as received, unless the investor's control over it is subject to substantial limitations or restrictions (§ 1.1031(k)-1(f)(2)).; Read the article: 1031 Exchanges for Tennessee Real Estate Investors: Deadlines, Intermediaries, and Contract Language
Quiet title: A lawsuit asking a court to declare who owns real property. It compels anyone with an adverse claim to prove that claim or be barred from asserting it in the future (Stinson v. Vest Family Ltd. Partnership, Tenn. Ct. App. 2022). Suits to remove a cloud on title have historically been heard in chancery court (Huggins v. Emory, Tenn. 1972).; Read the article: Title Defects and Clouds on Title in Tennessee: How They Get Fixed
Ratification: A person's express or implied adoption of an act or contract that someone else performed or entered into on that person's behalf while acting as an agent without authority (Regions Bank v. BRIC Constructors, LLC, Tenn. Ct. App. 2011). The party relying on it must prove that the principal, such as an LLC, accepted the benefits of the act with full knowledge of the facts, under circumstances or an affirmative election showing an intent to adopt it, and the question is usually one of fact (BRIC). Ratification is an affirmative defense, and in Kelly v. Stewart (Tenn. Ct. App. 2025), a member's unauthorized payments to himself were not ratified where the other members did not know about the compensation.; Read the article: Deadlock in a Closely Held Business: Decision Points Before Escalation
Real Estate Education and Recovery Account: A state fund, separate from the ordinary TREC complaint process, from which a person may recover actual or compensatory damages, not including interest and costs, caused by a real estate licensee's violation of the license law or the Commission's rules (Tenn. Code Ann. § 62-13-208(d)). The account's liability is capped at $15,000 per transaction and $30,000 in total for any one licensee, and a person who starts a lawsuit that may lead to payment from the account must notify the Commission in writing within 30 days of starting it (§ 62-13-208(d), (e)). A 2021 law removed the statute's requirement of a court judgment and court order before payment (2021 Tenn. Pub. Acts ch. 549), and the statute does not spell out the procedure that replaced it.; Read the article: What the Tennessee Real Estate Commission Can and Cannot Do
Residential property disclosure: The statement a seller of a home with one to four dwelling units generally must give a buyer about the property's condition under the Tennessee Residential Property Disclosure Act (Tenn. Code Ann. § 66-5-201). The statement is not a warranty and does not replace inspections, and a seller may give a disclaimer instead only if the buyer waives the disclosure (§§ 66-5-201, 66-5-202). A damages claim under the Act must be brought within one year after the buyer received the disclosure statement or the closing, whichever comes first (§ 66-5-208), and some transfers, such as foreclosures and sales by an owner who has not lived on the property within three years, are exempt (§ 66-5-209).; Read the article: Real Estate Fraud and Misrepresentation Claims in Tennessee
Right of first refusal: A right to buy property, or another interest, on the same terms as a third party's offer if the owner decides to sell. It is subject to a condition, typically the owner's receipt of a third-party offer and good-faith decision to accept it, and then ripens into an option; what triggers it depends on the contract's language and the facts (Riverside Surgery Center, LLC v. Methodist Health Systems, Inc., Tenn. Ct. App. 2005).; Read the article: Rights of First Refusal and Purchase Options in Tennessee Real Estate
S election: A federal tax election that lets an eligible corporation, or an eligible LLC, have its income and losses taxed to its shareholders instead of at the company level. Among other limits, the company may have no more than 100 shareholders and only one class of stock, and every shareholder must consent (26 U.S.C. §§ 1361, 1362, 1363, 1366). Tennessee franchise and excise tax still applies (Tenn. Code Ann. § 67-4-2004).; Read the article: S Corporation Elections for Tennessee LLCs: The Operating Agreement, the Owners, and Keeping the Election
Security deposit: Under Tennessee's Uniform Residential Landlord and Tenant Act, an escrow payment made to the landlord under the rental agreement to secure the landlord against financial loss from damage to the premises caused by the tenant's occupancy, other than ordinary wear and tear, and from monetary damage due to the tenant's breach of the rental agreement (Tenn. Code Ann. § 66-28-104). In counties covered by the Act, a landlord who requires one before occupancy must keep it in an account used only for security deposits (§ 66-28-301(a)).; Read the article: Security Deposits in Tennessee: What the Statute Requires of Residential Landlords
Series LLC: An LLC whose documents establish separate series, each with its own assets and obligations. If the LLC documents provide for series, each series keeps separate records and accounts for its assets separately, and the articles give notice of the limitation, the debts of a series can be enforced only against that series' assets (Tenn. Code Ann. § 48-249-309).; Read the article: Series LLCs in Tennessee: How the Liability Shield Works for Real Estate Investors
Specific performance: A court order requiring a party to do what the contract requires, such as closing the sale of real property, instead of only paying money damages. It is an equitable remedy within the trial court's discretion: although often regarded as an appropriate remedy for breach of a contract to convey real property, whether it fits depends on the facts of each case, and the contract must be clear, complete, and definite in all its essential terms (Morrow v. Jones, Tenn. Ct. App. 2004).; Read the article: Breach of Contract Claims in Tennessee: Elements, Remedies, and Deadlines for Business and Property Owners
Spoliation of evidence: Discarding, destroying, altering, or concealing evidence that bears on a legal dispute. A Tennessee court may sanction a party who does so (Tenn. R. Civ. P. 34A.02), even without intentional misconduct (Tatham v. Bridgestone Americas Holding, Inc., Tenn. 2015). The court weighs the totality of the circumstances, including whether the party knew or should have known, when the evidence was destroyed, that it was relevant to pending or reasonably foreseeable litigation, and the least severe sanction that would remedy the prejudice to the other side (Tatham).; Read the article: What Investigate and Advise Looks Like Before Suit
Statute of repose: A deadline that runs from a fixed event rather than from when an injury is discovered. For a deficiency in the design or construction of an improvement to real property, Tennessee's statute bars suit against those who designed, planned, supervised, or built it four years after substantial completion, regardless of when the defect was discovered (Tenn. Code Ann. § 28-3-202; Chrisman v. Hill Home Development, Inc., Tenn. 1998). An injury in the fourth year allows one more year, but never more than five years after completion (§ 28-3-203), and the statute does not protect a person in actual possession or control of the improvement when the deficiency causes the injury, or one who committed fraud in the work or wrongfully conceals the claim (§ 28-3-205). Since July 1, 2026, the four-year limit also does not apply to a counterclaim, cross-claim, or third-party complaint brought under Tenn. Code Ann. § 28-1-114(a) (§ 28-3-202, as amended by 2026 Tenn. Pub. Acts ch. 684).; Read the article: Construction Defect Claims in Tennessee: Warranties, Deadlines, and Damages
Tenancy in common: The default way two or more people co-own real property in Tennessee. Each owns an undivided share that passes to the owner's heirs or estate at death; a right of survivorship exists only if the deed clearly says so (Tenn. Code Ann. § 66-1-107; Bryant v. Bryant, Tenn. 2017). A deed to a married couple generally creates a tenancy by the entirety instead, unless it says otherwise.; Read the article: Real Estate Joint Ventures in Tennessee: How Co-Investors Hold and Govern One Property or Project
Veil piercing: A court's decision to disregard a company's separate existence so that an owner becomes personally liable for its obligations. Tennessee applies a three-part test: the owner's complete domination of the company, used to commit a fraud or wrong, that caused the injury (Youree v. Recovery House of East Tennessee, LLC, Tenn. 2025).; Read the article: Forming a Corporation in Tennessee: The Charter, Bylaws, Shares, S Election, and Upkeep
Wholesaling: Contracting to buy real property and then, before closing, assigning the buyer's equitable interest in the property to a later purchaser for a higher price than the buyer paid (Tenn. Code Ann. §§ 66-4-401, 66-4-402). Tennessee's statute allows a buyer to wholesale if the buyer discloses in writing, in bold, large font print included in the written agreement: to a potential assignee, the nature of the buyer's equitable interest; and to the seller, the buyer's intent to market that interest "prior to execution of the contract" and the effective date of any assignment at least three business days before it takes effect, if the contract allows assignment (§ 66-4-403(a)).; Read the article: Assigning a Real Estate Contract in Tennessee: Wholesaling, Disclosure, and Licensing Risk

These definitions are general educational information about Tennessee and federal law, not legal advice for any specific situation. Laws change, and how a term applies depends on the facts.